Order_FCC-15-35A1_(2).pdf

Federal Communications Commission FCC 15-35

Before the Federal Communications Commission

Washington, D.C. 20554

In the Matters of

Telcordia Technologies, Inc. Petition to Reform Amendment 57 and to Order a Competitive Bidding Process for Number Portability Administration

Petition of Telcordia Technologies, Inc. to Reform or Strike Amendment 70, to Institute Competitive Bidding for Number Portability Administration, and to End the NAPM LLC’s Interim Role in Number Portability Administration Contract Management

Telephone Number Portability

WC Docket No. 07-149

WC Docket No. 09-109

CC Docket No. 95-116

ORDER

Adopted: March 26, 2015 Released: March 27, 2015

By the Commission: Chairman Wheeler and Commissioners Clyburn and Pai issuing separate statements; Commissioner O’Rielly approving in part, concurring in part, and issuing a statement.

TABLE OF CONTENTS

Heading Paragraph #

I. INTRODUCTION

II. BACKGROUND

A. First LNPA Selection B. Current LNPA Selection

III. DISCUSSION

A. Process and Procedural Issues

1. The LNPA Selection Does Not Require Notice and Comment Rulemaking

2. The LNPA Selection Process Involves No Unlawful Delegation of FCC Authority

3. The Decisions to Extend the Bid Submission Deadline and to Decline to Request a

Second “Best and Final Offer” Were Proper

4. Neustar’s Claims Regarding the Bid Document Development and Process Are

Untimely and Barred by Principles of Waiver and Estoppel

5. The Role Played By the SWG in the LNPA Selection Process Is Consistent With the

Federal Advisory Committee Act B. Bidders’ Technical and Management Qualifications

1. Bid Review Methodology

2. NANC and NAPM Review Process

3. Evaluation of Bidders’ Technical and Management Qualifications

a. Evaluation of Technical and Management Qualifications Generally

b. Evaluation of Security and Reliability

(i) Business Continuity

(ii) Enhanced Law Enforcement Platform

(iii) Cybersecurity Requirements

(iv) Public Safety

(v) Other Comments and Concerns

C. Cost Aspects of Bids D. Transition Risks and Costs E. Neutrality Considerations F. IP Transition Issues G. Contract Negotiation and Ongoing Oversight of the LNPA H. Pending Telcordia Petitions

IV. ORDERING CLAUSES

APPENDIX: CONDITIONS ON IMPARTILTY/NEUTRALITY

I. INTRODUCTION

1. Today, the Federal Communications Commission (Commission) approves the recommendation of the North American Numbering Council (NANC) that Telcordia Technologies, Inc.

d/b/a iconectiv (Telcordia) serve as the next local number portability administrator (LNPA).1 As administrator of the system that allows consumers to keep their phone numbers when they switch service providers, the LNPA plays a crucial role in promoting consumer choice and competition among communications service providers. After a rigorous process—one that involved extensive input from the industry, government entities, and consumer groups, and was overseen by the Commission —we approve the recommendation of an experienced and qualified company to administer and keep secure this vital system. We recognize that since the inception of LNP service, law enforcement, public safety, and consumer protection capabilities have been built around the LNP service, and while some of these are not governed under the LNPA contract, each will be affected. In this Order, the Commission establishes a transparent process and schedule to ensure the effective, seamless, and timely transition of the LNPA.

2. This Order represents an important milestone, but not the final one. We establish a process for negotiating a contract with Telcordia, which will include close coordination with other governmental entities dedicated to ensuring a secure and reliable database that is vital to the functioning of the nation’s critical communications infrastructure, public safety, and the national security. We will ensure that parties that use the LNP database have an opportunity to conduct advance testing of the new system. And we will ensure that the transition to a new LNPA does not disrupt service to public safety, industry, the law enforcement community, or the public.

3. The LNPA contract2 is currently managed by a consortium of industry participants called the North American Portability Management, LLC (NAPM). In this Order, we authorize the NAPM to negotiate a proposed contract with the next LNPA, which the Commission will review for consistency with this Order.

II. BACKGROUND

4. The Commission is responsible for the administration of telephone numbers, pursuant to section 251(e)(1) of the Communications Act of 1934, as amended (Act).3 Congress directed the Commission to “create or designate one or more impartial entities to administer telecommunications

1 Number portability is “the ability of users of telecommunications services to retain, at the same location, existing telecommunications numbers without impairment of quality, reliability, or convenience when switching from one telecommunications carrier to another.” 47 U.S.C. § 153(37).

2 The LNPA contract will consist of seven substantially similar contracts, each dealing with a separate region of the country.

3 47 U.S.C. § 251(e)(1).

numbering and to make such numbers available on an equitable basis.”4 In 1996, the Commission established rules to enable a customer to keep the same telephone number even when the customer switches service providers.5 The Commission concluded that the ability to port telephone numbers would be instrumental in encouraging competition among telephone providers.6 In fact, the ability to port telephone numbers has become an integral part of our lives: on average, more than 100,000 telephone numbers are ported each day.7 The Commission has established rules to govern porting, such as how long a provider may take to port numbers and what information must be provided to the porting service provider.8 In addition, as discussed below, the Commission designated a third party, the LNPA, to administer the database used to ensure that number porting occurs in accordance with Commission rules.

The LNPA administers number porting and also maintains additional systems and services based on the information it has about the assignment of numbers: the Interactive Voice Response (IVR) System,9 the Enhanced Law Enforcement Platform (ELEP) Service,10 and the Intermodal Ported Telephone Number Identification Service, also known as “Wireless Do Not Call.” ELEP and IVR services are used by U.S.

law enforcement agencies and public safety answering points to identify the current facilities-based service provider of ported and pooled telephone numbers. ELEP is a subscription-based, online batch service with more functionality and capabilities than the free, phone-based interactive IVR service.

Wireless Do Not Call is used by U.S. telemarketers to identify telephone numbers that have been ported from wireline to wireless service to avoid violations of laws and rules against auto-dialing telephone numbers.

A. First LNPA Selection

5. In 1996, the Commission asked the NANC, its Federal Advisory Committee for North American Numbering Plan (NANP) administration, to implement a process for selecting and recommending to the Commission one or more independent entities to serve as the LNPA. In the First LNP Order, the Commission concluded that it is in the public interest to manage the porting of local numbers through regional databases administered by one or more neutral third parties.11 Also in that Order, the Commission directed the NANC to recommend one or more independent, non-governmental entities, not aligned with any particular telecommunications segment, to serve as LNPA(s).12 The NANC

4 Id.

5 See generally Telephone Number Portability, CC Docket No. 95-116, RM-8535, First Report and Order and Further Notice of Proposed Rulemaking, 11 FCC Rcd 8352 (1996) (First LNP Order) (subsequent history omitted).

6 Id. at 8401-05, paras. 93-102.

7 See Numbering Resource Utilization in the United States as of June 30, 2010 at 33, Table 14 (showing that 9,403,000 telephone numbers were ported during the third quarter of 2010) (Apr. 2013), https://apps.fcc.gov/edocs _public/attachmatch/DOC-319997A1.pdf.

8 See 47 C.F.R. § 52.20 et seq.

9 See generally Wireline Competition Bureau Seeks Comment on Procurement Documents for the Local Number Portability (LNP) Administration Contract, Public Notice, 27 FCC Rcd 11771 (2012) (Bid Documents Comments PN); see also See Wireline Competition Bureau Announces Release of Procurement Documents for the Local Number Portability (LNP) Administration Contract, CC Docket No. 95-116, WC Docket Nos. 07-149, 09-109, Public Notice, 28 FCC Rcd 1003 (2013) (Bid Documents Release PN) (bid documents provided by web links demonstrate discussed and implemented revisions to the Request for Proposals (RFP), Technical Requirements Document (TRD), and Vendor Qualification Survey (VQS)); see also RFP § 6.9.

10 See RFP § 11.2. Neustar calls this program the LNP’s Enhanced Analytical Platform (LEAP).

11 First LNP Order, 11 FCC Rcd at 8399-8400, paras. 91-92.

12 47 C.F.R. § 52.25(c). The Commission directed the NANC to recommend LNPA(s) within seven months. The Commission also directed the NANC to recommend the administrator selection process, the duties of the LNPA(s), the location of regional databases, the overall national architecture, and technical specifications for the regional

(continued….)

established the LNPA Selection Working Group (1997 Working Group) to review and give advice on LNP administration issues. In its April 25, 1997 report,13 the 1997 Working Group first recommended a process for selecting the LNPA(s)14 and later recommended that Lockheed Martin and Perot Systems be the LNPAs.15

6. In its 1997 Second LNP Order, the Commission adopted the NANC’s recommendation for an administrative structure that allowed non-profit industry regional limited liability companies (LLCs) to manage and oversee porting contractors.16 The LLC structure ultimately resulted in the creation of the NAPM, an industry consortium,17 which negotiated the contract for an entity, the LNPA, to administer the Number Portability Administration Center/Service Management System (NPAC/SMS).18 The NPAC/SMS consists of hardware and software platforms that host a national information database and serve as the central coordination point of LNP activity. In this Order, we refer to this system simply as the NPAC.

7. Also in the Second LNP Order, the Commission approved the NANC’s recommendation to select Lockheed Martin and Perot Systems as the LNPAs, subject to a successful contract negotiation.19 Subsequently, Lockheed Martin became the sole LNPA.20 In 1999, the Commission concluded that certain acquisitions by Lockheed Martin caused it to become a telecommunications service provider.21 As such, it no longer qualified as an impartial entity that could administer telecommunications numbering consistent with section 251(e)(1), which requires that numbering administrators be “impartial.”22 Therefore, the Commission approved the transfer of Lockheed Martin’s communications business unit to an affiliate of Warburg, Pincus & Company (Warburg), a private equity firm. That affiliate was Neustar, Inc. (Neustar).23 The original LNPA contract was for the term of five years, set to expire in 2002, but was

(Continued from previous page) databases. First LNP Order, 11 FCC Rcd at 8401, para. 93. This direction to the NANC was for a limited duration and has since expired. Petition of Telcordia Technologies Inc. to Reform or Strike Amendment 70, to Institute Competitive Bidding for Number Portability Administration, and to End the NAPM LLC’s Interim Role in Number Portability Administration Contract, WC Docket No. 09-109, Order, 26 FCC Rcd 6839, para. 5 (Wireline Comp.

Bur. 2011) (May 2011 Order).

13 See Letter from Alan C. Hasselwander, Chairman, NANC, to Reed Hundt, Chairman, FCC, CC Docket No. 95- 116 (May 1, 1997) (transmitting the report from the NANC's Local Number Portability Administrator Selection Working Group, dated Apr. 25, 1997, including Appxs. A-E) (1997 Working Group Report).

14 1997 Working Group Report at 4.1-4.6.

15 Id. at 6.2.4 16 Telephone Number Portability, CC Docket No. 95-116, RM-8535, Second Report and Order, 12 FCC Rcd 12281, 12297-98 (1997) (Second LNP Order) (subsequent history omitted).

17 Initially, there were seven separate LLCs, one for each of the seven Bell Operating Company regions. In 1999, the seven LLCs consolidated into one and became the NAPM LLC.

18 Second LNP Order, 12 FCC Rcd at 12303, para. 33.

19 Id. at 12283, para. 3.

20 Due to significant performance issues, in 1998 Lockheed Martin took over for Perot Systems.

21 In 1999, Lockheed Martin acquired Comsat Government Services, Inc. and a 49 percent interest in Comsat Corporation, thereby making Lockheed Martin an affiliate of a telecommunications service provider. See generally Request of Lockheed Martin Corporation and Warburg, Pincus & Co. for Review of the Transfer of the Lockheed Martin Communications Industry Services Business, CC Docket No. 92-237, NSD File No. 98-151, Order, 14 FCC Rcd 19792 (1999) (Warburg Transfer Order) (subsequent history omitted).

22 47 U.S.C. § 251(e)(1).

23 On November 30, 1999, a transaction agreement between Lockheed Martin Corporation and Warburg, Pincus was finalized, approving the transfer of Lockheed Martin’s Communications Industry Services (CIS) group from Lockheed Martin Corporation to Neustar, Inc. See North American Numbering Plan Administration (NANPA) extended three times. Neustar (or its predecessor-in-interest) has therefore remained the administrator since 1997. Neustar’s contract as the LNPA expires on June 30, 2015. Under its terms, the contract will automatically renew for one year if NAPM does not issue a notice of non-renewal 90 days prior to expiration of the current term.

B. Current LNPA Selection

8. Over several years, and after providing multiple opportunities for notice and comment, the Commission laid the groundwork for a competitive bid process that would lead to a new LNPA contract. In May 2009, Telcordia petitioned the Commission to institute a competitive bid process for the LNPA contract.24 The Bureau sought comment on Telcordia’s petition.25 In March 2010, the NAPM stated its intention to begin a competitive process to select a new LNPA, in anticipation of Neustar’s contract ending in 2015.26 In September 2010, the Bureau announced that the NAPM was developing a Request for Proposals (RFP) and encouraged participation by all interested parties.27

9. In February 2011, the NANC and the NAPM proposed to the Commission a process for selecting the next LNPA(s).28 As part of that proposal, the NANC would establish the LNPA Selection Working Group (Selection Working Group or SWG) and the NAPM would utilize its Future of Number

(Continued from previous page) Numbering News, Dec. 1999/Jan. 2000. This followed the Commission’s November 17, 1999 Order allowing the transfer of the NANPA from Lockheed Martin CIS to Neustar, Inc. See NANPA, NANPA Numbering News, http://www.nanpa.com/pdf/newsletters/nanpa_dec_jan.pdf (last visited Mar. 27, 2015); see also Warburg Transfer Order, 14 FCC Rcd 19792.

24 Petition of Telcordia Technologies Inc. to Reform or Strike Amendment 70, to Institute Competitive Bidding for Number Portability Administration and to End the NAPM LLC's Interim Role in Number Portability Administration Contract, WC Docket No. 09-109 (filed May 20, 2009) (Telcordia 2009 Petition). Telcordia raised in its petition other matters not related to the selection of a new LNPA through a competitive process. Telcordia also filed an earlier, related petition in 2007. Petition of Telcordia Technologies, Inc. to Reform Amendment 57 and to Order a Competitive Bidding Process for Number Portability Administration, WC Docket No. 07-149 (filed June 13, 2007) (Telcordia 2007 Petition) (asking the Commission to reform Amendment 57 to the current LNPA contract by eliminating the financial penalty provisions and to initiate an open competitive bidding process for number portability administration services); see also Wireline Competition Bureau Seeks Comment on Telcordia Technologies, Inc.’s Petition Regarding Number Portability Administrative Services, WC Docket No. 07- 149, Public Notice 22 FCC Rcd 13572 (Wireline Comp. Bur. 2007).

25 Wireline Competition Bureau Seeks Comment on Telcordia Petition to Reform or Strike Amendment 70, to Institute Competitive Bidding for Number Portability Administration, and to End the NAPM LLC’s Interim Role in Number Portability Administration Contract Management, WC Docket No. 09-109, Public Notice, 24 FCC Rcd 10271 (Wireline Comp. Bur. 2009). Neustar filed an opposition to the Telcordia petition, while the following parties filed comments and/or reply comments: COMPTEL; AT&T, Inc. (AT&T); XO Communications; Qwest;

NAPM (comments and reply comments);Verizon; Sprint Nextel Corporation; Comcast Corporation; OPASTCO; T- Mobile USA, Inc.; Telcordia (reply comments, PaeTec Communications, Inc. (reply comments) and TW Telecom (reply comments).

26 Letter from Todd D. Daubert, Counsel to NAPM LLC, to Marlene H. Dortch, Secretary, FCC, WC Docket Nos.

07-149, 09-109 (filed Mar. 22, 2010); see also Letter from Todd D. Daubert, Counsel to NAPM LLC, to Marlene H.

Dortch, Secretary, FCC, WC Docket Nos. 07-149, 09-109 (filed Aug. 27, 2010).

27 NAPM LLC Announces Request for Information from Vendors on Upcoming Request for Proposals for LNP Database Platforms and Services, CC Docket No. 95-116, WC Docket Nos. 07-149, 09-109, Public Notice, 25 FCC Rcd 13379 (Wireline Comp. Bur. 2010) (2010 Request for Information PN).

28 As both the NAPM and the NANC were aware that the current contract term was ending in 2015, jointly they suggested a process in February 2011, and in the March 2011 Order, the Bureau confirmed the general framework for the NANC’s and the NAPM’s involvement. See NANC/NAPM LLC Consensus Proposal for Clarification of the FCC’s Rules Regarding the LNPA Selection Process, WC Docket No. 09-109, dated Feb. 14, 2011 (NANC/NAPM Proposal); see also Telephone Number Portability, WC Docket No. 09-109, Order and Request for Comment, 26 FCC Rcd 3685, 3691-97, Attach. A (Wireline Comp. Bur. 2011) (March 2011 Order).

Portability Administration Center (FoNPAC) subcommittee in order to facilitate the selection process.29 In March 2011, the Bureau issued an Order and Request for Comment30 that: (1) stated that the NANC, working in consultation with the NAPM, should recommend and, after approval, implement a process for selecting the next LNPA(s),31 (2) directed the NANC to recommend to the Commission the next LNPA(s),32 (3) established a framework to ensure Bureau oversight of the LNPA selection process,33 and

(4) sought comment on the NANC/NAPM Proposal regarding the LNPA selection process.34 After reviewing the record, in May 2011 the Bureau issued an Order detailing the procedures that the NANC and the NAPM were to follow in the LNPA selection process.35 In that Order, in response to comments, the Bureau made some modifications to the NANC/NAPM Proposal.36 For example, NASUCA expressed concern that the proposal appeared to provide the NAPM with the final authority to negotiate, approve, and make the final decision about the LNPA contract award.37 The Bureau modified the NANC/NAPM Proposal to clarify that it is the Commission, or the Bureau acting on delegated authority, that has the final authority to select the LNPA(s), and that the NANC/NAPM Proposal does not delegate that authority to the NANC or the NAPM.38 The Bureau also confirmed that the Commission, or the

29 Members of the Selection Working Group were representatives of the Massachusetts Department of Telecommunications and Cable, the D.C. Public Service Commission, XO Communications, Verizon, AT&T, CenturyLink, Comcast, Cox, T-Mobile, and USTelecom. See Report of the Selection Working Group, presented at March 29, 2012 NANC meeting, for list of the Selection Working Group members, http://www.nanc-chair.org/docs/documents15-2012.html (last visited Mar. 27, 2015). Members of the NAPM were representatives of AT&T, Comcast, Level 3, Qwest/CenturyLink, Sprint Nextel, Time Warner Cable, T-Mobile, Vonage, Verizon, and XO Communications. See North American Portability Management LLC, Open Meeting and Minutes, NAPM LLC Open Portion Meeting Notice and Minutes August 22, 2012, https://www.napmllc.org/pages/openmeeting/ openmeeting_minutes.aspx (last visited Mar. 27, 2015). With the exception of Vonage, each member company of the NAPM had an individual employee who served on the FoNPAC. See also Letter from Dan A. Sclullo, Counsel to NAPM LLC, to Marlene H. Dortch, Secretary, FCC, CC Docket No. 95-116, WC Docket No. 09-109 (filed Mar.

4, 2015) (listing the members of the NAPM LLC currently and also those who comprised the FoNPAC from October 2013 through January 2014).

30 The following parties filed comments and replies in response to the request for comment: AT&T Reply (generally supporting the NANC/NAPM Proposal and LNPA Selection Process); Connecticut Department of Public Utility Control Reply (same); Massachusetts Department of Telecommunications and Cable Comments (same); NAPM Reply (same); Neustar Comments and Reply (same) (Neustar March 2011 Comments and Neustar 2011 Reply);

National Association of State Utility and Consumer Advocates (NASUCA) Comments (requesting modifications) (NASUCA March 2011 Comments); and Telcordia Comments and Reply (also requesting modifications).

31 See March 2011 Order, 26 FCC Rcd at 3687, para. 5 (“We find that the delegation to the NANC, with assistance from the NAPM, will allow the Commission and interested parties to get the benefit of the NANC’s and the NAPM’s significant experience with the LNP process.”).

32 Id. at 3686, para. 5 33 Id. at 3687-88, para. 8 (requiring the NANC/NAPM to: (1) provide the Bureau a timeline for the LNPA selection process and inform the Bureau of its progress; (2) obtain Bureau authorization before issuing any bid documents; (3) provide any requested information on selection process; and (4) submit a recommendation to the Bureau, after evaluating the bidders, which includes a ranked evaluation of the bidders that relies on criteria established in the

RFP).

34 Id. at 3687, para. 7.

35 See generally Petition of Telcordia Technologies Inc. to Reform or Strike Amendment 70, to Institute Competitive Bidding for Number Portability Administration and to End the NAPM LLC’s Interim Role in Number Portability Administration Contract; Telephone Number Portability, WC Docket No. 09-109, CC Docket No. 95-116, Order, 26 FCC Rcd 6839 (Wireline Comp. Bur. 2011) (May 2011 Order).

36 Id. at 6841-43, paras. 7-16, 3845-47 (Attach. A).

37 NASUCA March 2011 Comments at 7.

38 May 2011 Order, 26 FCC Rcd at 6841, paras. 8, 19.

Bureau, acting on delegated authority, must make a final decision about the contract award.39 In response to Telcordia’s concerns about the transparency of the bidding process, the Bureau modified the NANC/NAPM Proposal to specify an enhanced role for the SWG in reviewing all bid documents: the RFP; the Technical Requirements Document (TRD); and the Vendor Qualification Survey (VQS)) (collectively, bid documents) submitted by the FoNPAC.40 In addition, the Order further outlined the Bureau’s role in overseeing the LNPA selection process.41 No party sought reconsideration or full Commission review of the Bureau’s Order establishing the LNPA selection process. To the contrary, many parties, including Neustar, affirmatively stated their support for the process the Order established.42

10. In 2012, the NANC and the NAPM prepared draft bid documents and the Bureau issued a Public Notice in August 2012 seeking comment on those documents.43 Over the next six months, interested parties commented on and proposed changes to the bid documents. In particular, Neustar and

39 Id.at 6844, para. 19 (“[T]he Commission or the Bureau, acting on delegated authority, must review and approve the procurement process, including the procurement documents, and make a final decision about the contract award.

In addition, once the LNPA contract is in place, the Commission or the Bureau will retain ultimate oversight and control over the contract.”).

40 Id. at 6842-43, para. 13; id., Attach. A, para. 5.i. The Bureau declined to implement Telcordia’s request to keep the SWG in place until the contract was implemented and to impose a specific directive about the composition of the SWG Chairs. See id. at 6842, paras. 11-12; see supra note 9.

41 See id. at 6844, paras. 19-20 (clarifying that “the Commission or the Bureau, acting on delegated authority, must review and approve the procurement process, including the procurement documents, and make a final decision about the contract award”). The Bureau further noted that the May 2011 Order “is one of several actions that the agency will take to implement the LNPA contract(s).” Id.

42 See, e.g., id. at 6841, para. 7, n.18 (listing commenters in support of the process established in the March 2011 Order); see also Letter from Aaron M. Panner, Counsel to Neustar, Inc., WC Docket Nos. 09-109, 07-149, CC Docket No. 95-116, at 1 (filed Nov. 22, 2011) (“Neustar supports the LNPA selection process set forth by the Commission in its May 16, 2011 Order.”) (Neustar Nov. 22, 2011 Ex Parte Letter). Seven parties filed favorable comments and/or replies with respect to the LNPA Selection Process in 2011, including Neustar. Only two requested substantive changes (Telcordia and NASUCA), which were addressed. See May 2011 Order at 3; see also supra note 30. Recently more parties have filed in support of the process. See Letter from Peter Karanjia, Counsel to CTIA, to Marlene H. Dortch, Secretary, FCC, WC Docket Nos. 09-109, 07-149, CC Docket No. 95-116 at 1-2 (Nov. 20, 2014) (CTIA Nov. 20, 2014 Ex Parte Letter) (requesting the Commission to expeditiously approve the NANC recommendation of the new LNPA and stressing the transparency and integrity of the LNPA selection process); Letter from Lynn Follansbee, Vice President, Law & Policy, USTelecom, to Marlene H. Dortch, Secretary, WC Docket No. 09-109, CC Docket No. 95-116 at 1-2 (filed Feb. 4, 2014) (seeking approval of NANC’s recommendation of the new LNPA and urging the Commission to begin the transition process); Letter from Tiki Gaugler, XO Communications, to Marlene H. Dortch, Secretary, FCC, WC Docket No. 09-109, CC Docket No. 07- 149 at 1 (filed Dec. 24, 2014) (XO Dec. 24, 2014 Ex Parte Letter) (“XO vigorously refutes arguments that the LNPA Selection Process, as established or conducted, was inherently biased or disadvantaged any industry segment.”); see also Letter from B. Lynn Follansbee, Vice President, Law & Policy, USTelecom, to Marlene H.

Dortch, Secretary, FCC, WC Docket No. 09-109, CC Docket No. 95-116, at 1-3, Attach. (filed Mar. 19, 2015) (USTelecom Mar. 19, 2015 Ex Parte Letter) at 1-3 (refuting LNP Alliance’s arguments that small and medium carriers were excluded and it was over burdensome for smaller carriers to participate and attaching XO’s Dec. 24, 2014 Ex Parte Letter); see also Letter from James C. Falvey, Counsel to LNP Alliance, to Marlene H. Dortch, Secretary, FCC, WC Docket No. 09-109, CC Docket. No. 95-116 at 1, 3 (filed Mar. 23, 2015) (LNP Alliance Mar.

23, 2015 Ex Parte Letter) (stating that the USTelecom Group and XO do not represent small carriers and all of the major organizations that do represent small incumbent and wireless carriers—National Telephone Cooperative Association (NCTA), the Rural Broadband Alliance, the Competitive Carriers association and the Western Telecommunications Alliance (WTA)—have all weighed in requesting the FCC to extend the time before selection and conduct a Regulatory Flexibility Analysis).

43 See Bid Documents Comments PN. The following parties filed comments in response to the Public Notice: Idaho Public Utilities Commission; Neustar; Telcordia; Public Knowledge; Vermont Public Service Board; NAPM;

Comcast; and AT&T, CTIA, CenturyLink, Level 3, Verizon, USTelecom, and XO (filing joint comments).

Telcordia commented on how to ensure that the LNPA(s) would be neutral and impartial, and discussed whether bidders should be required to submit regional bids (i.e., separate bids to serve various regions of the country), nationwide bids, or some combination thereof.44 From the release of the Bid Documents Comments PN in August 2012 until the release of the bid documents in February 2013, Neustar and Telcordia each submitted 11 filings in the docket about the bid process. In response, and following extensive on-the-record communications, the Bureau directed the NAPM and the NANC to make certain modifications to the draft bid documents. In particular, the Bureau determined that bidders should have flexibility regarding whether to submit regional or national bids, or both, and developed a process under which the Commission, rather than the NANC and NAPM, would evaluate in the first instance whether a bidder met the neutrality requirements of the statute.45 In light of those modifications, both Neustar and Telcordia urged the Bureau to direct the NANC and NAPM to proceed expeditiously with the selection process.46 Notwithstanding the extensive communications by the parties about modifications to the draft bid documents, neither party suggested that the bid documents were deficient with regard either to network security or accommodating the Internet Protocol (IP) transition.

11. In February 2013, the Bureau announced the release of the bid documents to solicit bids for a new contract for the LNPA.47 Responses to the bid documents were originally due on April 5, 2013, 44 See, e.g., Letter from Aaron M. Panner, Counsel to Neustar, Inc. to Marlene H. Dortch, Secretary, FCC, CC Docket No. 95-116, WC Docket Nos. 07-149, 09-109 at 5-6 (filed Sept. 11, 2012) (claiming “procurement designs that require awards to more than one vendor would likely increase rather than decrease the cost of NPAC services relative to a sole- source, winner-takes-all procurement”); Letter from Aaron M. Panner, Counsel to Neustar, Inc., to Marlene H. Dortch, Secretary, FCC, CC Docket No. 95-116, WC Docket Nos. 07-149, 09-109 at 3 (filed Oct. 18, 2012) (Neustar Oct. 18, 2012 Ex Parte Letter) (“Given the legal requirement of public disclosure, the Commission can and should evaluate any potential concerns about bidders’ neutrality after the NANC has made its recommendation.”); Letter from Aaron M. Panner, Counsel to Neustar, Inc., to Marlene H. Dortch, Secretary, FCC, CC Docket No. 95-116, WC Docket Nos. 07-149, 09-109 (filed Nov. 6, 2012) (Neustar Nov. 6, 2012 Ex Parte Letter). But see Letter from John T. Nakahata, Counsel to Telcordia Technologies, Inc., d/b/a iconectiv, to Marlene H. Dortch, Secretary, FCC, CC Docket No. 95-116, WC Docket No. 09-109 at 1 (filed Nov. 13, 2012) (stating “[c]ontrary to Neustar’s suggestion, requiring regional bids does not undermine the competitive bidding process nor does it bind the FoNPAC, SWG or Commission to awarding the NPAC contract on a regional basis.”); see also Letter from John T. Nakahata, Counsel to Telcordia Technologies, Inc., d/b/a iconectiv, to Marlene H. Dortch, Secretary, FCC, CC Docket No. 95-116, WC Docket No. 09-109 at 1 (filed Nov. 16, 2012) (“Telcordia believes that the neutrality review must address both (1) certain universally applicable neutrality principles, to which all Respondents may be required to agree, and also (2) the specific, individual circumstances of each LNPA.”).

45 See Bid Documents Comments PN; see also Bid Documents Release PN.

46 See, e.g., Letter from Aaron M. Panner, Counsel to Neustar, Inc. to Marlene H. Dortch, Secretary, FCC, CC Docket No. 95-116, WC Docket Nos. 07-149, 09-109 at 3-4 (filed Sept. 13, 2013) (Neustar Sept. 13, 2013 Ex Parte Letter) (“The RFP process established by the Federal Communications Commission (‘Commission’), with important input from state regulators, and implemented by the industry, is generally well designed to achieve those goals; with a limited number of clarifications to the RFP documents ,the process should go forward as planned without delay.”);

see also Letter from Aaron M. Panner, Counsel to Neustar, Inc., to Marlene H. Dortch, Secretary, FCC, CC Docket No. 95-116, WC Docket Nos. 07-149, 09-109 at 1 (filed Oct. 23, 2012) (Neustar Oct. 23, 2012 Ex Parte Letter) (“[T]he Commission should allow the RFP process to move forward as soon as possible . . . . That process has the strong support of all aspects of the industry, state regulators, and consumers. . . .”); Neustar Nov. 6, 2012 Ex Parte Letter at 1 (stating that all parties, including Telcordia, urge that the procurement documents be finalized and issued expeditiously); Letter from John T. Nakahata, Counsel to Telcordia Technologies, Inc., d/b/a iconectiv, to Marlene H. Dortch, Secretary, FCC, WC Docket Nos. 07-149, 09-109 at 3 (filed Apr 12. 2011) (“Telcordia supports NAPM's request that the selection process be determined expeditiously”); Letter from John T. Nakahata, Counsel to Telcordia Technologies, Inc., d/b/a iconectiv, to Marlene H. Dortch, Secretary, FCC, WC Docket Nos. 07-149, 09-109 at 4 (filed Aug. 30, 2012) (supporting the expeditious completion of the LNPA bid documents).

47 See Wireline Competition Bureau Announces Release of Procurement Documents for the Local Number Portability (LNP) Administration Contract, CC Docket No. 95-116, WC Docket Nos. 07-149, 09-109, Public Notice, 28 FCC Rcd 1003 (Wireline Comp. Bur. 2013) (Bid Documents Release PN).

but the NAPM extended the deadline to April 22, 2013.48 Two companies submitted bids: Neustar and Telcordia. The FoNPAC prepared and released the bid documents and reviewed the responses to the bid documents on behalf of the entire NAPM. The Selection Working Group, or SWG, reviewed the FoNPAC’s analysis of the bid documents in order to provide a preliminary evaluation that could be shared with the NANC. Over the next six months, the NAPM reviewed the responses to the bid documents and conducted interviews with the two bidders. The NAPM, on August 15, 2013, solicited a “Best and Final Offer” (BAFO) from the two bidders; both responded on September 18, 2013.49 On October 21, 2013, Neustar submitted a second, unsolicited BAFO, along with a cover letter requesting that the bid be considered.50 On January 15, 2014, the NAPM rejected the second BAFO, without considering it.51 On February 11, 2014, the Chief of the Wireline Competition Bureau sent a letter to the NANC Chair stating that filings in the record “raise concerns over the fairness of this proceeding thus far” and directed the NANC to include in its ultimate recommendation an evaluation of those matters.52

12. On February 26, 2014 and March 20, 2014, the SWG and the NAPM respectively forwarded their recommendations for the next LNPA to the NANC.53 On March 26, 2014, the NANC met in a closed session to vote on which vendor(s) to recommend to the Commission.54 After presentations by the NAPM’s FoNPAC and the NANC’s SWG subcommittees, the full NANC membership unanimously (with two abstentions) recommended the selection of Telcordia as the sole LNPA for a period of five years, with the option for two one-year extensions.55 The NANC Chair filed

48 Details about that extension are discussed below in section III.A.3.

49 Report of the North American Portability Management LLC In Response to the Wireline Competition Bureau Letter dated Feb. 11, 2014, with Attachs. 1-4, at 43-44 (filed Apr. 25, 2014) (NAPM Process Report).

50 NAPM Process Report at 45-47; see infra note 57.

51 NAPM Process Report at 63 [BEGIN CONFIDENTIAL]

[END CONFIDENTIAL] Details of this decision are discussed below in section

III.A.3. See also Neustar, Inc. 2014 Recommendation Reply, WC Docket No. 09-109, CC Docket No. 95-116 at 34 (filed Aug. 22, 2014) (Neustar 2014 Recommendation Reply); Neustar Process Petition Concerning the Local Number Portability Administration Selection Process, WC Docket No. 09-109, CC Docket No. 95-116 (filed Feb.

12, 2014) (Neustar Process Petition). Telcordia filed an opposition to the Neustar petition. Opposition of Telcordia Technologies, d/b/a iconectiv to Neustar’s Petition for a Declaratory Ruling, WC Docket Nos. 09-109, 07-149, CC Docket No. 95-116 (filed Feb. 24, 2014) (Telcordia Opposition to Neustar’s Process Petition). Neustar replied to Telcordia’s opposition on March 4, 2014. Reply of Neustar in Support of its Petition of Declaratory Ruling, WC Docket No. 09-109, CC Docket No. 95-116 (filed Mar. 4, 2014).

52 See Letter from Julie A. Veach, Chief, Wireline Competition Bureau, FCC, to Hon. Betty Ann Kane, Chairman, North American Numbering Council, WC Docket No. 09-109, CC Docket No. 95-116 (dated Feb. 11, 2014) (WCB Feb. 11, 2014 Letter).

53 See Letter from Hon. Betty A. Kane, Chairman, North American Numbering Council, to Julie A. Veach, Chief, Wireline Competition Bureau, FCC, WC Docket No. 09-109, CC Docket No. 95-116 (dated Apr. 24, 2014 and filed Apr. 25, 2014) (NANC Recommendation).

54 FCC Announces a Closed Meeting of the North American Numbering Council, Public Notice, CC Docket No. 92- 237, 29 FCC Rcd 10045 (Wireline Comp. Bur. 2014).

55 Commission Seeks Comment on the North American Numbering Council Recommendation of a Vendor to Serve as Local Number Portability Administrator, WC Docket No. 09-109, CC Docket No. 95-116, Public Notice, 29 FCC Rcd 6013 (Wireline Comp. Bur. 2014) (2014 Recommendation PN); see also NANC Recommendation at 1 (Confidential Version); id. at 2 [BEGIN CONFIDENTIAL]

[END

CONFIDENTIAL] see also Letter from Sanford S. Williams, WCB, FCC, to Marlene Dortch, Secretary, FCC, CC Docket 95-116, WC Docket Nos. 07-149, 09-109 at 177 (filed Mar. 3, 2015) (attaching transcript of March 26, 2014 the NANC’s recommendation with the Commission on April 25, 2014.56 Included with the recommendation letter were four separate confidential reports: a report each from the SWG and the FoNPAC to the NANC detailing the selection of the next LNPA, and an investigative report to the NANC from each entity prepared in response to the Bureau’s request to address allegations of possible process shortcomings in connection with the LNPA selection.57

13. On June 9, 2014, the Bureau released a Public Notice requesting comment on the NANC’s recommendation of Telcordia as the next LNPA.58 The Bureau also released a Second Level Protective Order adopting procedures to address access to certain particularly competitively sensitive information filed or to be filed in the proceeding.59 On June 24, 2014, the Bureau, on its own motion, released a Revised Protective Order to allow greater access to materials that, while confidential or competitively sensitive, are not among the parties’ most sensitive materials.60 In response to the 2014 Recommendation PN, parties filed comments and reply comments.61

(Continued from previous page) NANC Closed Meeting) (NANC Meeting Transcript) (noting there were actually two abstentions, not one as previously noted in the NANC Recommendation).

56 See Letter from Hon. Betty A. Kane, Chairman, North American Numbering Council, to Julie A. Veach, Chief, Wireline Competition Bureau, FCC, WC Docket No. 09-109, CC Docket No. 95-116 (dated Apr. 24, 2014 and filed Apr. 25, 2014) (NANC Recommendation).

57 See id. attaching the following reports: (1) LNPA Selection Working Group (SWG) Report to the NANC on LNPA Vendor Selection Recommendation of the Future of the NPAC Subcommittee (FoNPAC), dated Feb. 26, 2014, and filed Apr. 25, 2014 (NANC Selection Report); (2) Future of NPAC Subcommittee (FoNPAC) Local Number Portability Administration Request for Proposal Evaluation Summary and Selection Report, filed Apr. 25, 2014 (NAPM Selection Report); (3) LNPA SWG Selection Process Report, dated Apr. 14, 2014, and filed Apr. 25, 2014 (NANC/SWG Process Report); and (4) NAPM Process Report; see supra note 52.

58 2014 Recommendation PN; see also Commission Extends Comment Deadlines for Public Notice Seeking Comment on the North American Numbering Council Recommendation of a Vendor to Serve as Local Number Portability Administrator, WC Docket No. 09-109, CC Docket No. 95-116, Public Notice, 29 FCC Rcd 7967 (Wireline Comp. Bur. 2014) (extending the comment date until July 25, 2014 and the reply comment date until August 8, 2014); Commission Further Extends Reply Comment Deadline for Public Notice Seeking Comment on the North American Numbering Council Recommendation of a Vendor to Serve as Local Number Portability Administrator, WC Docket No. 09-109, CC Docket No. 95-116, Public Notice, 29 FCC Rcd 9597 (Wireline Comp.

Bur. 2014) (extending the reply comment date until August 22, 2014).

59 Petition of Telcordia Technologies, Inc. to Reform or Strike Amendment 70, to Institute Competitive Bidding for Number Portability Administration and to End the NAPM LLC’s Interim Role in Number Portability Administration Contract; Telephone Number Portability, WC Docket No. 09-109, CC Docket No. 95-116, Second Level Protective Order, 29 FCC Rcd 6022 (Wireline Comp. Bur. 2014).

60 Petition of Telcordia Technologies, Inc. to Reform or Strike Amendment 70, to Institute Competitive Bidding for Number Portability Administration and to End the NAPM LLC's Interim Role in Number Portability Administration Contract; Telephone Number Portability, WC Docket No. 09-109, CC Docket No. 95-116, Revised Protective Order, 29 FCC Rcd 7592 (Wireline Comp. Bur. 2014).

61 The following parties filed comments: Cequel Communications, LLC d/b/a Suddenlink Communications (Suddenlink); CTIA – The Wireless Association/ United States Telecom Association (CTIA/USTelecom); Intrado Inc.; LNP Alliance; NAPM; Neustar; Telcordia; TeleCommunication Systems, Inc. (TCS); and U.S. TelePacific Communications/Hypercube Telecom, LLC (TelePacific/Hypercube). The following parties filed reply comments:

CTIA/USTelecom (CTIA/USTelecom); Federal Bureau of Investigations, Drug Enforcement Administration, United States Secret Service, and U.S. Immigration and Customs Enforcement (FBI et. al.); International Association of Chiefs of Police/National Sheriffs’ Association (IACP/NSA); LNP Alliance; National Emergency Number Association: The 9-1-1 Association (NENA); Neustar; Public Utility Division of Oklahoma Corporation Commission (OK Corp. Comm.); Telcordia; and TCS.

III. DISCUSSION

A. Process and Procedural Issues

14. Neustar and some commenters raise a number of procedural objections to the Commission’s LNPA selection process. They contend that the Commission was required to conduct a notice and comment rulemaking to select a new LNPA; that the Commission has unlawfully delegated its role in selecting the LNPA to the NANC; that the selection process was tainted by certain decisions that favored Telcordia and handicapped Neustar; that the bid documents (the RFP, TRD, and VQS) were developed without adequate participation by relevant constituencies; and that the conduct of the SWG and the NANC in the selection process violated the Federal Advisory Committed Act (FACA). As detailed below we conclude that most of these claims are untimely and have been waived and, in any event, that none has merit.62

1. The LNPA Selection Does Not Require Notice and Comment Rulemaking

15. Position of the Parties. Neustar contends that the Commission must conduct a notice and comment rulemaking proceeding, initiated with a notice of proposed rulemaking (NPRM), in order to select a new LNPA.63 That is so, according to Neustar, because (1) the designation of a LNPA meets the Administrative Procedure Act’s (APA’s) definition of a “rule,”64 (2) the 1996 Act requires the

62 We note that a recent ex parte filed by a Czech Republic investment firm argued that its investment in Neustar is subject to special protections stemming from a 1992 treaty between the United States and the Czech Republic governing the fair, equitable and non-discriminatory treatment of foreign investment into US companies. See Letter from Sanford S. Williams, WCB, FCC, to Marlene H. Dortch, Secretary, FCC, CC Docket 95-116, WC Docket Nos.

07-149, 09-109 (filed Mar. 20, 2015) (attaching Letter from Jan Martinek, Partner, Central European Capital Partners, to Commissioner Mignon Clyburn, FCC (dated March 20, 2015) (Martinek Letter)). The Martinek Letter states that awarding the next LNPA contract to Telcordia “would culminate a series of violations of the clear procedural requirements governing the … [LNPA contract] award process,” would impair its investment in Neustar, and therefore would violate the treaty. See id. Since we determine herein that none of the issues raised in the Martinek Letter have merit, there is no concern about a potential treaty violation. Furthermore, we also disagree with the Martinek Letter’s interpretation of the relevant treaty. The referenced treaty is a bilateral investment treaty (BIT) that contains “national treatment” provisions. National treatment provisions of treaties ensure that foreign-owned companies receive similar treatment to U.S.-owned companies. Because there is no national treatment issue in this proceeding, the concerns raised in the Martinek Letter have no bearing on our conditional selection of Telcordia to be the next LNPA.

63 Neustar, Inc. 2014 Recommendation Comments, WC Docket No. 09-109, CC Docket No. 95-116 at 50-62 (filed Aug. 6, 2014) (Neustar 2014 Recommendation Comments) (Neustar originally filed comments on July 25, 2014 that were corrected by an Errata and corrected comments filed Aug. 6, 2014); see also Neustar 2014 Recommendation Reply at 30-33; see also Letter from Michael Calabrese, Director, Wireless Future Project, New America, to Marlene H. Dortch, Secretary, FCC, CC Docket No. 95-116, WC Docket Nos. 07-149, 09-109, GN Docket No. 13- 5, Attach. at 2 (filed Mar. 9, 2015) (New America Mar. 9, 2015 Ex Parte Letter) (requesting that the Commission review and clarify the future role of the number portability system and LNPA through a rulemaking). New America also urges the Commission to address policy issues surrounding non-geographic numbering. The Commission is considering these issues in the Direct Access Notice of Inquiry, Technology Transitions and Numbering Testbed proceedings. They are important issues regardless of who serves as the next LNPA. See Numbering Policies for Modern Communications et al., WC Docket No. 13-97 et al., Notice of Proposed Rulemaking, Order, and Notice of Inquiry, 28 FCC Rcd 5842, 5890 (2013); see also Technology Transitions et al., GN Docket No. 13-5 et al., Order, Report and Order and Further Notice of Proposed Rulemaking, Report and Order, Order and Further Notice of Proposed Rulemaking, Proposal for Ongoing Data Initiative, 29 FCC Rcd 1433 (2014); see also Chief Technologist to Host Numbering Testbed Workshop, WC Docket No. 13-97, Public Notice, 29 FCC Rcd 2115 (Wireline Comp.

Bur. 2015); see also Letter from John T. Nakahata, Counsel to Telcordia Technologies, Inc. d/b/a iconectiv, to Marlene H. Dortch, Secretary, FCC, at 1 (filed Mar. 19, 2015) (Telcordia Mar. 19, 2015 Response to New America Ex Parte Letter) (stating that the paper shows no sign of independent investigation or evaluation, but merely “cherry-picks” comments that most favor Neustar’s arguments).

64 Neustar 2014 Recommendation Comments at 51-52 (citing 5 U.S.C. § 551(4) (definition of a “rule”)).

Commission to employ its rulemaking authority when selecting a LNPA,65 and (3) the current LNPA was designated by legislative rule and, once adopted, such a rule may be modified only through notice and comment rulemaking procedures.66 In Neustar’s view, therefore, the current proceeding—which was not commenced with an NPRM—does not present a lawful basis on which to select a new LNPA.

16. Telcordia and others, by contrast, contend that this LNPA selection proceeding properly is viewed as an informal adjudication to which the APA’s rulemaking procedures do not apply.67

17. Discussion. We find, as an initial matter, that Neustar’s rulemaking claim is untimely.

The Wireline Competition Bureau established the process for selecting the next LNPA in the May 2011 Order, which did not provide for notice and comment rulemaking procedures.68 Although the Commission’s rules require parties aggrieved by staff action taken on delegated authority to seek reconsideration or Commission review within 30 days,69 neither Neustar nor any other party argued that notice and comment rulemaking procedures were required until April 2014,70 long after the selection process had been established and the bids submitted. Accordingly, Neustar has waived its rulemaking claim.71

18. The claim is baseless in any event. For the reasons discussed below we find that this proceeding is properly viewed as an informal adjudication and that the Commission satisfied all applicable procedural requirements. In general, “the choice . . . between proceeding by general rule or by individual, ad hoc litigation” lies “primarily in the informed discretion of the administrative agency.”72 The Commission opted to conduct the LNPA selection process as an informal adjudication, and it had discretion to do so. Furthermore, the Commission satisfied all applicable procedural requirements associated with such a proceeding. We reject Neustar’s argument that we are required by law to select the next LNPA through notice and comment rulemaking.

19. Contrary to Neustar’s assertions,73 there is nothing inherently legislative in selecting an LNPA that forecloses acting through adjudication. The agency had already established a process for

65 Neustar 2014 Recommendation Comments at 53-54 (citing 47 U.S.C. §§ 251(b)(2) & 251(e)(1)).

66 Neustar 2014 Recommendation Comments at 55-61 (citing, e.g., Sprint Corp. v. FCC, 315 F.3d 369, 374 (D.C.

Cir. 2003)).

67 Telcordia Technologies, Inc. d/b/a iconectiv 2014 Recommendation Reply, WC Docket No. 09-109, CC Docket No. 95-116 at 50-61 (filed Aug.